Houston-based natural gas company Tellurian said it would construct only one of four planned gas pipelines under the first phase of its Driftwood LNG export project if it decides to proceed with it. The scale-back and lower feedgas costs are expected to cut the project’s initial capital costs by 30%, according to the company’s new investor presentation.
Following the cutbacks, Driftwood LNG phase one will include only the 4 Bcfd Driftwood Pipeline which already secured permits. Meanwhile, the 2 Bcfd Permian Global Access Pipeline, 1 Bcfd Haynesville Global Access Pipeline, and 2 Bcfd Delhi Connector Pipeline will be deferred although they can be revived later if market conditions warrant.
The cutbacks came as the COVID-19 pandemic ravaged global gas demand and prompted widespread cargo cancellations at US liquefaction facilities this summer. As a result, some US LNG developers, including Tellurian, delayed FIDs on their projects.
